A new survey from BlackRock Inc. underscores a persistent disconnect between retirement savers' confidence and their actual financial readiness. The firm's 2025 Read on Retirement report, released Tuesday, found that 68% of workplace retirement plan participants believe they are on track for retirement, while 66% of employers share that optimism about their workers. Yet a deeper analysis of savings behavior suggests these perceptions may be overly rosy.
BlackRock's modeling projects that current workplace plan balances will replace only about 50% to 60% of the annual income participants expect from those savings. This gap between expectation and reality spans generations: 76% of Gen Z participants feel on track, but projected savings cover roughly 58% of their expected income; 73% of millennials are confident, yet their plans may provide only 54%; and 60% of Gen X feel on track, with projected savings covering about half of anticipated income.
“Confidence is growing, but for too many Americans, retirement reality won’t match retirement expectations,” said Jaime Magyera, head of retirement and head of U.S. wealth advisory at BlackRock. The findings echo broader concerns about retirement security, as highlighted in a recent survey showing 69% of older Americans doubt Social Security solvency as trust fund depletion approaches 2032.
The survey also reveals a gap between desired and actual savings rates. Participants said they believe they need to save 15% of their pay for retirement but are currently contributing just 10% on average. More than half of respondents indicated they may need to reduce contributions due to mounting financial pressures and competing priorities, such as emergency expenses. This aligns with earlier BlackRock data showing emergency savings gaps drive 401(k) raids and stifle new contributions.
In response to these challenges, workers are increasingly looking beyond traditional saving strategies. BlackRock found growing interest in tools designed to improve retirement outcomes, including active management, private market investments, and guaranteed income solutions. The survey also found that 81% of participants want more personalized retirement guidance.
Technology may play a larger role in delivering that support. According to the survey, one in four plan sponsors are already using AI-generated financial guidance, highlighting the growing role artificial intelligence could play in helping workers make retirement planning decisions. On the participant side, 53% said they are interested in AI-assisted retirement guidance.
The findings underscore the need for advisors and plan sponsors to address the confidence gap through better education, personalized advice, and innovative plan design. As Magyera noted, bridging the divide between perception and reality will be critical to ensuring retirement readiness for millions of Americans.
